Ella 
EUR/USD remains under pressure at its lowest level in a week, falling as low as 1.0925 during the early European hours on Monday. EUR/USD has justified the market’s push for the greenback despite recent headlines in Italy that have been bullish for the greenback.
Italian Prime Minister Giorgia Meloni has ruled out further trouble for banks after announcing a one-off 40% windfall profit tax on banks and taking full responsibility for it. The dollar index (DXY) retreated from a one-month high, also spurring euro bears.
However, concerns over a collapse in China’s debt market and a looming recession in the euro zone put downward pressure on EUR/USD prices, especially as U.S. Treasury yields moved higher.
Additionally, Germany’s wholesale price index (WPI) for July was mixed, also favoring EUR/USD sellers.
Still, China’s debt woes were exacerbated by the suspension of its bond trading by China’s Country Garden and a failure to receive a payment from a subsidiary of Chinese conglomerate Zhongzhi Enterprise Group. Elsewhere, risk aversion was fueled by Russia preparing to equip new nuclear submarines with hypersonic missiles and the US-China trade war, which in turn weighed on EUR/USD prices.
Elsewhere, European Central Bank (ECB) officials have previewed policy pivots in recent public appearances, while the ECB’s monthly economic outlook highlighted macro uncertainty, keeping euro bears hopeful.
Amid these factors, the S&P 500 and Euro Stoxx futures remained modestly quoted, while the U.S. 10-year Treasury yield was higher around 4.17%.
Looking ahead, EUR/USD traders will be stimulated by a light Eurogroup schedule ahead of the Fed minutes, coupled with cautious sentiment. However, risk aversion may keep sellers hopeful.
